BHP, Rio Tinto Plan Cuts As China Growth Targets Dim

BHP Billiton (BHP), the world's largest miner by market capitalization, said it plans to cut an unspecified number of jobs in its profitable iron ore mining operations to rein in costs.

BHP, Rio Tinto (RIO), Vale SA (VALE) and other miners are under heavy pressure as global demand for minerals falls.

The World Bank and International Monetary Fund this week cut their economic growth forecasts for China, a key market for the mining giants. The IMF sees Chinese GDP growth of 7.8% this year, down from 8% previously.

BHP said it will eliminate redundant positions and shift people to other posts where possible. Reports said it currently has about 900 job openings across the iron ore business. The company employs about 6,000 people in its iron ore unit, of its global total 46,000.

The company earlier shelved plans for a $20 billion expansion at its Port Hedland, Australia iron ore port in August.

Rio Tinto, No. 2 global miner, said it also plans to speed up cost cuts after having already slashed $500 million in expenses. BHP and Rio Tinto are both heavily dependent on sales to China, which had seen explosive growth in building, including large infrastructure projects, prior to the 2008-09 recession.

"Significant stimulus efforts have been announced in China, the U.S. and Europe, but it's uncertain exactly when we will see the impact of these on our markets," Rio Tinto CEO Tom Albanese said in a statement on Tuesday.

"Given this, and the considerable price fluctuations in recent times, we are somewhat more cautious on the outlook over the next few quarters," he added.

After Tuesday's market close, aluminum giant Alcoa (AA) reports third-quarter earnings results. Analysts now expect a break-even quarter, down from a 15-cent-per-share gain a year earlier. Also reporting late Tuesday is Yum Brands (YUM), operator of KFC, Pizza Hut and Taco Bell. Fast food and iron ore have little in common, except that Yum has relied heavily on China growth in recent years. Yum profit likely rose 17% to 93 cents a share.

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03/17/2015 12:17 PM ET

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